Friday Poll: How Do You Handle Collections?

This week’s poll question was prompted by a recent Radio Ink article by Paul Weyland on the subject of collections. Weyland notes, “…Whether you’re paid on billing or collection, ultimately you’re paid on collection — because if you’re paid on billing and then you don’t collect, the station will eventually take back the money they paid you on your billing.” He then presents tips for getting paid sooner than later – one of which is to ask for cash in advance or to put it on a credit card. You can read the entire article here.

So this week, we’d like to know:

What are your best tips and strategies for getting your clients to pay in a timely fashion? What has been your most challenging experience with collections?

From Nancy Friedman Mescon on the RSC Facebook page: "I would like to know if it is a standard thing in radio for sales people to lose their commission on sold business when the client has not paid within 90 days. Is this commonplace? Thanks."

Other than agency, when we sign a client, we ALWAYS take their 1st month payment right then and there. Then 15 days prior to their billing cycle, we have their invoice emailed to them. They know that their spots will not play until their payment is received.

We use quickbooks online which allows us to set up annual's with a invoice generated automatically each month and the customer can pay by bank draft or check. We do take credit card payments, but pass on a 3.5% processing fee to the client.

From Roger Utnehmer: For more than 35 years our policy on collections was that payment was due no later than the last day of the month after the month the ads ran. What that meant is that sales reps spend the last day of every month calling on the slow-pay clients to collect. With an average of 20 selling days a month we were wasting 5% of a sales reps time trying to get paid. Compounded by agencies that would pay in 90 to 120 days, we just got fed up being the poor step-child. We boldly adopted a cash in advance policy with all annuals paid by automatic bank draft on the last business day of the month the the following month’s schedule. This has been well-received by staff who no longer have to go through the embarrassing trouble of asking slow-pay accounts for money. No client is not advertising with us because of the change. Be bold. Ask and you get. Don’t and you won’t....

From Chris Rolando: Every radio station I have ever worked for. The "Sale" is everything from prospecting to Payment and that is what a Rep gets commissioned on. BTW, now that I buy media I am here to tell you that credit is a small market thing. In the larger markets I buy in, it is always pay for the coming month in front of the month.

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